Energous IPO: Smartphone charging from a distance gets a boost

PLEASANTON -- Less than two years after forming a company, Energous managed to bring in $24 million in an initial public offering meant to help the small team complete its vision of smartphones and other devices being charged without an effort from the owner.

Energous has developed a wireless charging approach that works at a distance, using base stations to charge mobile devices without plugging them in or halting the use of the device. So far, Energous has managed to send energy up to 30 feet from its transmitters, which are similar in size and shape to a Wi-Fi router, to receivers meant to mimic mobile devices, which CEO Stephen Rizzone termed "a game-changing technology."

"Our technology has the key components that we believe the consumer wants in a wire-free solution: It has power, it has distance and it has mobility," Rizzone said Friday. "You have the ability to charge your phone when you're walking around your office, when your cellphone is lying on the desktop, or when you're at Starbucks getting a cup of coffee."

Energous sold 4 million shares at $6 apiece in the offering, which will be used to reduce the size of its receiver to a small chip, making it more useful in a system that it hopes to license to device manufacturers. Investors seemed to be excited about the technology, driving the price as high as $11.45 on the open market in the stock's Friday debut, which ended with shares going for $10.58, a 76.3 percent gain.

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Most companies as young as Energous seek venture funding instead of going public, but Rizzone said Friday in a telephone interview from New York, where he was set to ring the closing trading bell, that there "are real advantages to being in the public markets."

"It's a very significant competitive advantage as we try to recruit a world-class organization," Rizzone said, explaining that the ability to offer stock options that will be liquid as soon as they vest is a selling point the company will use to add to an employee base that currently totaled nine workers at year's end.

After meeting with about 30 possible partners at this year's CES electronics conference in Las Vegas, Rizzone hopes to have its first consumer products ready to show off at the 2015 CES, with sales rolling out later that year.

About half the funds Energous raised will be used for research and development of the charging system, while the rest is targeted for sales and marketing, computer purchases and other administrative needs. Currently based in Pleasanton, Energous is looking to expand and could look for new offices outside the East Bay city, though Rizzone said the company will stay in Silicon Valley.

Since being founded by current Chief Technical Officer Michael Leabman in October of 2012, Energous has run up debts of about $5.5 million without generating any revenue; debt holders will also receive roughly 1.8 million shares in the company in exchange for their notes. The underwriting bank, MDB Capital Group, has the right to purchase an additional 400,000 shares at roughly $7.50 a share if it chooses.

Energous also sold slightly more than 210,000 shares to strategic partner Hanbit Electronics of Korea for $1 million earlier this month in a private placement.